Time is running out for dairy farmers in the Ohio Valley to apply for the USDA Margin Protection Program.
Producers in the past have shied away from the U.S. Department of Agriculture’s Margin Protection Program due to complaints of high costs and low returns. The 2018 Bipartisan Budget Act made several changes to the safety-net program to provide better protections for dairy producers from shifting milk and feed prices.
Updates according to USDA include:
Calculation of the margin period is monthly rather than bi-monthly;
Covered production is increased to 5 million pounds on the Tier 1 premium schedule, and premium rates for Tier 1 are substantially lowered;
An exemption from paying an administrative fee for limited resource, beginning, veteran, and socially disadvantaged producers. Dairy operators enrolled in the previous 2018 enrollment period that qualify for this exemption under the new provisions may request a refund.
Undersecretary Bill Northey says payments are also retroactive to the first of the year.
“Folks are such that they earned a margin in Feb, March and April--probably enough to pay for their premium if they are the right size producer with less than 5 million pounds of production,” Northey said.
An oversupply of milk has saturated markets. For the last several months the average price of milk has been around 30 percent below cost of production. Farm Service Agency Spokesman Wayne Maloney said there was a slight increase in milk prices in April, but there was also a significant increase is the cost of feed.
Two major processors in the region Dean Foods and Prairie Farms said they would cancel contracts and close operations by the end of June, affecting more than 100 producers.
Kentucky Agriculture Commissioner Ryan Quarles announced a grant this week to purchase $30-thousand-dollars of milk for God’s Pantry Food Bank. The goal is to grow the bank program from 60 gallons a week to 2,500.
Northey said efforts to alleviate the dairy crisis will not make dairy farmers ‘whole’ but will “take the edge off.”
According to the USDA, producers can go directly to the FSA County Office to apply for the MPP Dairy program by the June 1 deadline or they can download the application form CCC-782 and mail with their $100 administrative fee to the FSA County Office. If the application is mailed it must be postmarked no later than the June 1, 2018 deadline date to be considered timely filed and enrolled for 2018 coverage.